It carries forward many of the existing provisions of the 2003 iorp directive and includes new provisions focusing on governance, communications and reporting requirements, as well as making changes to the crossborder pensions regime and placing an emphasis on environmental, social. The eu has recently approved a major revision of the eu legislation on workplace pension schemes the directive on institutions for occupational retirement provision. Institutions for occupational retirement provision ii. Revision of the institutions for occupational retirement provision directive iorp ii summary in 2014, the european commission proposed a revision i orp ii of the existing institutions for occupational retirement provision i orp directive of 2003, which covers certain occupational pension savings. A pension depositary a vehicle included in the iorp ii directive could play such a role. Original article pensions reform in the european union. Scope of the ucits iv merger provisions ucits only. The first allows for the merger of mandatory industrywide pension funds with a ringfenced. Transposition of the iorp ii directive aba comments on. Directive eu 20162341, on the activities and supervision of institutions for occupational retirement provision iorp ii came into force on 12 january 2017 and must be implemented into irish law by january 2019. The european insurance and occupational pensions authority eiopa has created two model pension benefit statements to provide practical guidance on how to implement the annual information document that iorps are required to send to their members following the implementation of the iorp ii directive.
Key tenets of iorp ii iorp ii impact on pension funds in europe given the gravity and nature of the impact the iorp ii directive will have on pension rms, pension providers across the eu have been keenly following the rulemaking. Institutions for occupational retirement provision. Ucits iv mergers the luxembourg law of 17 december 2010 the fund law offers new opportunities for market consolidation and rationalisation of ucits structures through the possibility of merging ucits both on a domestic and crossborder basis. The iorp ii directive will become law in january 2019, bringing about widespread impact on pension funds across the eu with regard to risk management and governance. And on top of all that, the ecs action plan on sustainable finance looks set to bring in new rules on esg to all financial market participants. Adam cadle looks at why the directive has stalled and the state of current crossborder pension provision across europe. Directive as last amended by directive 200064ec of the european parliament and of the council oj l 290, 17. Belgiums implementation of the eu directive on the supervision of institutions for occupational retirement provision iorp ii took effect on jan 2019, although some transitional measures will apply.
Pensions depositaries are new vehicles under the iorp pensions directive. Institutions for occupational retirement provision iorp directive of 2003, which covers certain. Draft report econ committee the econ committees rapporteur on the iorp ii directive, brian hayes, has published his longawaited draft report on the legislation. As implementing iorp ii is an action for member states, individual pension schemes do not need to refer directly to the wording of the directive. Eu directive on institutions for occupational retirement. Revision of the occupational pension funds directive. Transposition of the iorp ii directive aba comments on potential eiopa guidelines and recommendations main points state of play. Commission welcomes deal to improve rules for occupational. Time for change iorp ii implementation across europe. The purpose of the 2003 iorp directive was to establish a system of regulation of iorps or occupational pension funds that was common across the european union subsequently adopted by european economic area eea countries of norway, iceland and liechtenstein. The european parliaments economic and monetary affairs econ committee has published its draft report on the revised iorp directive which was proposed by the previous european commission back in march 2014. However, the member states are invited by the commission to a workshop re.
As implementing iorp ii is an action for member states, individual pension schemes do not need to refer directly to the wording of. The discussions around iorp ii began in 2011, when the ec issued a call for advice1 on potential changes to the 2003 pensions directive. At an early stage, the proposed directive was referred to as solvency ii for pensions, reflecting its similarity to the insurance directive of the same name. Article 20 of the directive seeks to enable an occupational pension scheme established in one eu member state to be sponsored by employers in other member. As with the iorp i directive, member states can choose to exempt schemes with less than 100 members from much of its scope, but iorp ii further provides that schemes with more than 15 members must be subject to much of the general governance and prudent person investment requirements. Should you have any questions on issues reported here or on other areas of law, please contact one of your regular contacts, or. The netherlands senate has enacted legislation dutch to implement the eu directive on institutions for occupational retirement provisions. A genuine internal market for occupational retirement provision. Jun 17, 2011 an iorp operating crossborder is subject to the notification procedure set out in the directive. As with much of the recent financial sector legislation to emerge from the financial crisis of 2008, the directive aims to improve governance and accountability in relation to workplace pensions. The directive harmonises basic prudential rules governing the operation of iorps. Learn more about the technology changes that pension funds must undertake to comply with the heightened governance requirements. Iorp directive pensions and lifetime savings association.
Lcp guide to the new european pensions directive the iorp ii. Simply put, an iorp will remain subject to the prudential supervision of the relevant authorities of its home member state that is, where the iorp was established, but will also become subject to supervision by the relevant authorities in the host member state or states where it. The court introduces state liability c39811, hogan directive 200894 must be interpreted as meaning that the fact that the measures taken by ireland subsequent to robins and others have not brought about the result that the plaintiffs would receive in excess of 49% of the value of their. Information provided before or at the time of joining a scheme should. The institutions for occupational retirement provision iorps directive is being revised for several reasonsi.
Their only option is a merger with another sector scheme. Iorp ii focuses on the governance of pension schemes and on their communications with individual members. Directive srd ii in force from 9 june 2018 and to be incorporated into national law by 10 june 2019. Eu direct tax newsalert cjeu judgment on the compatibility with eu law of the finnish legislation implementing article 102 of the merger directive pwc s eu direct tax group eudtg is pwc s paneuropean network of eu law experts. On pages 46 we summarise the key legal developments and what steps trustees need to take to. Even if you reform the iorp crossborder pensions 18 crossing borders regulation the iorp ii directive is still awaiting finalisation as it passes through varying levels of scrutiny. With the iorp ii directive coming to force starting january 2019, pension firms in europe will have to revamp the it systems and processes that support risk management and governance functions. To simplify legal, regulatory and administrative requirements for settingup crossborder pension funds 2. There may come a time when i am unable, due to physical or mental incapacity, to make my own health care decisions. In some member states, selfemployed persons cannot join an iorp unless cer tain requirements, including those imposed by social and labour law, are met. One bigger change is the division of the document into six main sections or titles. Combined advanced directive for health care document. Iorp ii updates, replaces and signiicantly expands iorp i, which was adopted in 2003.
The key objectives of the revised iorp ii directive are to. The directive has builtin proportionality throughout the text and the additional requirements are unlikely to impose a disproportionate burden on smaller occupational pension funds. Revision to occupational pensions directive iorp ii eurosif. Agenda item 5 iorps directive the iorps directive, which was published on 23rd september 2003 is required to be implemented by the member states by 23rd september 2005. Belgiums implementation of the eu directive on the supervision of institutions for occupational retirement provision iorp ii took effect on. The european parliament, the council and the commission have agreed on a proposal for a revised iorp ii directive the directive. Iorp ii impact on pension funds tata consultancy services.
Aug 31, 2012 our story starts with the 2003 iorp directive, although that was itself many years in the making. A missed opportunity to improve outcomes for savers, the. Combined advance directive for health care combined proxy and instruction directive i understand that as a competent adult i have the right to make decisions about my health care. The authority will provide technical support to the department of employment affairs and social protection in transposing the directive. A pension scheme in the context of the iorp directive is an agreement laying down the pension promise to the members and beneficiaries of the scheme article 6 b. I need to add multiple pdfs each single page to my main pdf.
The extent if at all to which the uk will need to comply with iorp ii is unlikely to be known until the terms of brexit become much clearer. First, with the iorp directive a first step towards an internal european. Lcp guide to the new european pensions directive december 201 3 even though the uk will be leaving the european union we currently consider it likely that iorp ii. Directives directive eu 20192121 of the european parliament and of the council of 27 november 2019. The occupational pension funds directive 200341ec also known as the iorp directive lays down basic requirements for occupational pension funds and their supervision, including rules which oblige occupational pension funds to invest their assets prudently, in the best interest of their members and beneficiaries. Directive 200341ec represented a first legislative step on. To improve and modernise regulation for iorps that operate dc plans. The legislation focuses on improved communications, clarification of arrangements for crossborder value transfers, and stricter governance rules covering risk management, internal audits and actuarial. Dec 21, 2016 the european council set out in its publication that the directive is aimed at facilitating the development of institutions for occupational retirement provision iorps and better protecting. Proposal for a directive of the european parliament and of the council on the activities and supervision of institutions for occupational retirement provision recast delegations will find attached the text of the abovementioned directive, as provisionally agreed with the european parliament. To introduce riskbased supervision for iorps, focus on three main pillars 3. The aim of the directive is to create an internal market for occupational retirement provision organised on a european scale. After the publication of the iorp ii directive in the official journal, the process of transposition has begun.
It lays down minimum standards on funding pension schemes, the types of investments pensions may make and permits crossborder management of pension plans. Directive 200341ec on the activities and supervision of institutions for occupational retirement provision iorp directive has been adopted in 2003. February 2012 confirmed the iorp directive would be revised. The occupational pension funds directive 200341ec also known as the iorp directive lays down basic requirements for occupational pension funds and their supervision, including rules which oblige occupational pension funds to invest their assets prudently. One of the latest developments affecting pension schemes operating with the european economic area eea is eu pensions directive iorp ii.
Depositaries could manage assets for pension funds, and are already deployed by investment funds to separate the ownership of the investment from the operational management of the investment firm. Comments on the iorp directive introduction the aae published a position paper in november 2015 commenting on the european commissions proposal for revision of the iorp directive, which was published in march 2014, including references to the initial draft report by the econ rapporteur. This would pose excessive administrative burdens and costs for pension funds, in particular smaller ones. It transforms the directive with extensive new requirements on governance and communications.
In all these transactions, the merger directive provides for tax deferral of the taxes that could be charged on the income or capital gains derived by the shareholders of the transferring or the acquired company from the exchange of such shares for shares in the receiving or the acquiring company. However, the iorp ii directive has attracted criticism in the netherlands, especially from populist politicians. Jun 30, 2016 the revised directive, based on a proposal adopted by the commission in 2014, strengthens and replaces the existing 2003 iorp directive. Pensionseurope welcomes the modernised rules for eu. The iorp ii directive sets common standards ensuring the soundness of occupational pensions and better protects pension scheme members and beneficiaries, by means of among others. In addition, some of the measures go too far in harmonizing aspects of occupational. We will discuss some key aspects of the directive and the way in which these aspects have been implemented in several eu member states. The authority will provide technical support to the department of employment affairs and social protection in transposing the directive into law by the eu deadline. The directive is the result of almost three years of discussion and negotiation. The law introduces new information requirements, sets conditions for crossborder pension activities and requires prudential supervision. The occupational pension funds directive 200341ec also known as the.
The amendments to the existing legislation focus on governance and disclosure. The original pensions directive known as iorp i introduced a number of new rules for iorps broadly, occupational pension schemes. Iorp ii and solvency ii should be extended until the quantitative requirements applicable to iorps have been revised. The directive should focus on the activities and the risks borne by the iorp, not on the underlying schemes.
Jan 24, 2017 written by david eatock 4th edition, in 2014, the european commission proposed a revision iorp ii of the existing institutions for occupational retirement provision iorp directive of 2003, which covers certain occupational pension savings. Netherlands seeks to implement iorp ii directive news ipe. Iorps directive the iorps directive, which was published on 23rd september 2003 is required to be implemented by the member states by 23rd september 2005. These rules minimum standards are designed to ensure that occupational pension scheme transactions. Moreover, member states have the option not to apply the directive, in whole or in part, to any iorp with less than 15 or 100 members, while keeping some basic. In the internal market, institutions for occupational retirement provision iorps should have the possibility to operate in other member states while ensuring a high level of protection and security for members and beneficiaries of occupational pension schemes. In 2014, the european commission proposed a revision iorp ii of the existing. Iorp ii 4 this publication is intended merely to highlight issues and not to be comprehensive, nor to provide legal advice. The directive enables an employer in one member state to sponsor an iorp.
European economic area countries, which encompass the 28 eu member states. They see it as an attack by brussels on the dutch pension sector. The directive, which came into force across the eu on january 2019, was not transposed into irish law in accordance with the eu timescales. Directive eu 20162341 of the european parliament and of the council of 14 december 2016 on the activities and supervision of institutions for occupational retirement provision iorps recast1 hereafter iorp ii is a recast of and supplement to directive 200341ec of 3. Recent developments after the implementation of the iorp directive 0 financial marketsfinancial stability, dutch ministry of finance, korte voorhout 7, p. A new european pensions directive the directive came into force on 1 january 2017 formally directive eu 20162341 of the european parliament and of the council of 14 december 2016 on the activities and supervision of institutions for occupational retirement provision iorps, published in the eu official journal of 23 december 2015. Mar 15, 2017 over two years after initially being proposed, the new iorps directive 20162341ec iorps ii was adopted by the european parliament on 14 december 2016 and came into effect on 12 january.
For example voluntary application to schemesinstitutions with dual character or to personal pensions recommendation that high standards of governance and supervision should apply to all types of pension schemes recommendation to examine impacts on the operation of article 4. Introduction a new european pensions directive the directive came into force in january 2017. Iorp 2 directive developments in the european parliament. Institutions for occupational retirement provision directive 20162341 is a european union directive designed to create an internal market for occupational retirement provision. Following todays approval by the council, the text will have to be formally approved by the european parliament. Member states now have until 12 january 2019 to implement it. Review of iorp directive just when you thought it was safe to go back in the water mark dowsey 29 october 2 context 2003 iorp directive brought us the delights of ssfr, internal controls, tku and more iorp directive is being revised largely to bring it into line with other amended financial regulation. Health and benefits wealth and investments workforce and careers mergers and acquisitions. As such, it is easy to see which parts of the proposed directive are new. Revision to occupational pensions directive iorp ii.
This was the culmination of six months of negotiations and was agreed in june 2016. It does not include any harmonised solvency rules for occupational pension funds. Lcp radar update iorp ii legislation delayed iorp ii, the directive which is expected to significantly enhance pension scheme governance was not transposed into irish law by january 2019 as expected. A new version of the european union directive on institutions for occupational retirement provision iorp is set to have a profound impact on workplace pensions.
Directive eu 20162341 of the european parliament eurlex. Comments on the proposed iorp directive insurance europe. Institutions for occupational retirement provision directive. The new eu directive on the activities and supervision of institutions for occupational retirement provision iorp ii was adopted in 2016. Whether or not the new iorp directive will be implemented in the uk is clearly uncertain following the outcome of the recent eu referendum and will depend upon the timing and terms of the uks exit. These need to be added after a specific page number and not appended to the end. The napf has compiled a detailed clausebyclause analysis of the new iorp directive, comparing the new proposals with the current legislation that they would replace and commenting on the amended versions of the text from the council of ministers and european parliament. It concerns disclosure documents to be given to prospective members and members in the pre. The eu commission has now proposed that the 2003 iorp directive be revised to address these issues.
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